ATM transactions have recovered to 82% of pre-covid levels:
Covid hugely impacted transactions of ATMs as there were restrictions on the movement of people. There have been certain changes brought out by Kotak Mahindra Bank in areas of cash management, monitoring of ATMs in the last 2 years. The bank has managed and deployed cash efficiently regularly during the said period. Kotak Mahindra Bank has a national footprint of 1612 branches and 2591 ATMs.
Puneet Kapoor, President, Products, Alternate Channels and Customer Experience Delivery at Kotak Mahindra Bank, informs: “To ensure uninterrupted services to our customers and for providing a regular supply of cash to them, we launched ‘ATM on Wheels’ in 6 major metro cities – Mumbai, Delhi, Bengaluru, Pune, Hyderabad, and Chennai. The vans were moved from society to society as per planned schedules. Additionally, sufficient cash balances were maintained in all Kotak branches and offsite ATMs so that customers did not face any cash outs.”
2nd Wave Impacted ATM Usage
The pandemic and subsequent lockdown towards the end of March 2020 impacted the usage of ATMs. Puneet vouches: “Transactions picked up in the last quarter of FY21. However, the second wave again adversely affected the usage of ATMs. Currently, ATM transactions have recovered to 82% of pre-covid levels. ATMs placed at IT parks and in tech companies are still affected as a majority of employees continue to work from home.”
The regulatory landscape has recently changed with regard to deployment -replenishment of cash and levy of penalties. Puneet feels: “The introduction of recent regulatory mandates is loading the cost of overall monthly operating expenditures of ATMs.”
Micro-ATM At Metro’s Outskirt
Kotak Mahindra Bank has recently undertaken measures to increase easy access to cash withdrawal. Puneet explains: “To deliver essential banking services conveniently to a larger section of consumers living in relatively far-off areas, our bank has launched micro-ATMs across the country. Customers of all banks who possess a debit card can use a Kotak micro-ATM for key banking services such as cash withdrawals and checking account balances.” KMBL is using its extensive BC network to use micro-ATMs.
Puneet adds: “The BC could be a shopkeeper for instance, who will act as a convenient touchpoint for customers and assist them with the transaction. Using their debit card and PIN, customers can conduct transactions instantly through the Kotak micro-ATM. The micro -ATM is connected to the core banking network using the GPRS networks.”
Kotak’s network of micro-ATMs across the country will help customers of all banks get easy access to their bank accounts and promote financial inclusion. In the first phase, KMBL is introducing micro-ATMs in the outskirts of the top 8 metro cities –locations where the demand for cash withdrawal services is high but the prevalence of ATMs is low.
The ATM penetration rate in India makes interesting reading. Sharing a global perspective, Manjunath Rao, President, Managed Services, CMS Info Systems, points out: “The ATM penetration rate in India is significantly low, compared to countries like China, Mexico, and Indonesia. In India, the under-penetration is more pronounced in the rural regions. Compared to the national average of 22 ATMs per 100,000 individuals, metropolitan regions have 26 ATMs per 100,000 population. However, the SU (semi-urban) RU (rural) region is severely under-penetrated, with a rate of 15 ATMs per 100,000 individuals. In the next 6 years, approximately 1.1 lakh new ATMs will be added, with most of them coming in the SURU regions.”
Public sector banks are resuming expansion of their ATM networks after a period of stagnation as evidenced by the recent increase in requests for proposals for ATM implementation. Rao expects that public sector banks will outsource more than two-thirds of their ATM-managed services.
Digital Devices Penetration
The Payments Infrastructure Development Fund (PIDF) Scheme, operationalized by RBI from January 01, 2021, subsidizes deployment of PoS infrastructure (physical and digital modes) in tier-3 to tier-6 centers and north-eastern states of the country. From August 26, 2021, beneficiaries of PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) in tier-1 and tier-2 centers are also covered.
Contribution to the PIDF is made by the Reserve Bank, authorized card networks, and card-issuing banks; the corpus currently stands at Rs6.14 billion. RBI has made a contribution of Rs2.50 bn towards this, followed by authorized card networks (Rs1.53 bn) and card-issuing banks (Rs2.10 bn). The number of payment acceptance devices deployed under the PIDF Scheme as of end-September 2021 is 5,536,678 digital devices and 245,942 physical devices. Digital devices include inter-operable QR code-based payments such as UPI QR, Bharat QR, etc. Physical devices include PoS & mPoS (mobile PoS).